WTI 's rally could just be getting started

NYMEX:CL1!   Light Crude Oil Futures
The more we look at market positioning on WTI, the more we suspect that oil may be dominating headlines as we head into 2024.

In recent weeks we can see that large speculators and asset managers have been increasing long exposure and reducing shorts, which is the ideal scenario for a bullish trend. Yet net-long exposure for both sets of traders remains low by historical standards, and therefore shows no immediate threat of the move higher being extended. If anything, it could look underbought considering OPEC's desire to support prices.

And when you consider oil is rising despite the stronger US dollar, you get to appreciate how strong the rally could get if the dollar's rally were to falter. Either way, with a rising US dollar and oil prices, 2024 could get messy and perhaps risk assets will get their reckoning once more.


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